Bangladesh Bank (BB) has issued guidelines for operations of business in Bangladesh by Joint Ventures or Consortiums or Associations (JVCA) having foreign partner (s) in order to make the process more transparent and more accountable.
The central bank in a circular issued on Wednesday said JVCA with foreign partner(s) engaged in the implementation of development projects of government of Bangladesh in terms of contracts or sub-contracts signed with respective departments or divisions or employers etc., have shown diverse practices in their reporting activities and cross-border transactions, preparation of financials, transactions with their branch offices, outward remittances particularly profit remittances, tax payments and return submissions.
Authorized Dealers (ADs) shall adhere to the instructions of guidelines for banking transactions and guide their relevant customers to ensure meticulous compliance.
As per the guidelines, entities having non-resident partner(s) after forming JVCA (hereinafter referred to as JVCA entity) shall have to obtain permission from Bangladesh Investment Development Authority (BIDA).
A valid contract among the partners of respective JVCA entity or any entity of that nature under the concerned project office has to be signed accordingly.
The activities of the JVCA shall be confined to those mentioned in the BIDA permission letter.
JVCA entities shall have TIN or BIN or VAT certificates etc. as per rules of National Board of Revenue (NBR). Moreover, these entities shall submit income tax returns on regular basis.
The JVCA entity shall maintain a bank account with any AD branch of any scheduled bank of Bangladesh in the name and title of the JVCA entity, in whose favor work order has been awarded.
AD branch maintaining such account shall be treated as nominated AD.
All inward and outward remittances have to be executed and all payments payable abroad and receivable from abroad shall be monitored and reported to Bangladesh Bank through the nominated AD.
